ARE YOU BUILDING A PIPELINE OR HAULING BUCKETS
Once upon a time there was this quaint little village, it was a great place to live except for one problem.
the village had no water unless it rained. To solve this problem once and for all, the village elders decided to put out to bid the contract to have water delivered to the village on a daily basis.
Two people volunteered to take on the task and the elders awarded the contract to both of them. They felt a little competition would keep prices low and insure a back up supply of water.
The first of the two people who won the contract ED, immediately ran out, bought two galvanized steel buckets and began running back and forth along the trail to the lake which was miles away. He immediately began making money as he labored morning to dusk hauling water from the lake with his two buckets. He would empty them into a large concrete holding tank the village had built. Each morning he had to wake up before the rest of the village woke up to make sure there was enough water for the village when it wanted it.
It was hard work but he was very happy to be making money and for having one of the two exclusive contracts for his business.
The second contractor Bill , disappeared for a while. He was not seen for months, which made Ed very happy since he had no competion. Ed was making all the money.
instead of buying two buckets to compete with Ed, Bill had written a business plan, created a corporation, found four investors, employed a president to do the work; and returned six months later with a construction crew. Within a year, his team had built a large stainless steel pipeline which connected the villageto the lake.
At the grand opening celebration, Bill announced that his water was cleaner than Ed's water, Bill knew that there had been complaints about dirt in Ed's water. Bill also announced that he would supply the village with water twenty four hours a day seven days a week. Ed could only deliver water on week days.....he did not work on weekends. Then Bill announced that he would charge 75% less than Ed did for his high quality and more reliable source of water. The village cheered and ran immediately ran for the faucet at the end of Bill's pipeline.
In order to compete, Ed immediately lowered his rates by 75%, bought two more buckets, added covers to his buckets and began hauling four buckets each trip. In order to provide better services, he hired his two sons to give him a hand for the night shift and on weekends. When his boys went to college, he said to them, 'Hurry back because someday this business will belong to you.' For some reasons, after college his two sons never returned. Eventually Ed had employees and union problems. This union was demanding higher wages, better benefits and wanted it's members to only haul one bucket at a time.
Bill on the other hand , realised that if this village needed water then other villages must need water too. He re-wrote his business plan and went off to sell his high speed, high volume, low cost and clean water delivering system to the villages throught the world. He only makes a penny per bucket of water delivered, but delivers billions of buckets of water every day. Regardless if he works or not. Billions of people consume billions of buckets of water, and all that money pours into his bank account. Bill had delivered a pipeline to deliver money to himself as well as water to the villages.
Bill lived happily ever after and Ed worked hard for the rest of his life and had financial problems forever after. THE END
This is an extract from CASHFLOW QUADRANT by ROBERT KIYOSAKI
the village had no water unless it rained. To solve this problem once and for all, the village elders decided to put out to bid the contract to have water delivered to the village on a daily basis.
Two people volunteered to take on the task and the elders awarded the contract to both of them. They felt a little competition would keep prices low and insure a back up supply of water.
The first of the two people who won the contract ED, immediately ran out, bought two galvanized steel buckets and began running back and forth along the trail to the lake which was miles away. He immediately began making money as he labored morning to dusk hauling water from the lake with his two buckets. He would empty them into a large concrete holding tank the village had built. Each morning he had to wake up before the rest of the village woke up to make sure there was enough water for the village when it wanted it.
It was hard work but he was very happy to be making money and for having one of the two exclusive contracts for his business.
The second contractor Bill , disappeared for a while. He was not seen for months, which made Ed very happy since he had no competion. Ed was making all the money.
instead of buying two buckets to compete with Ed, Bill had written a business plan, created a corporation, found four investors, employed a president to do the work; and returned six months later with a construction crew. Within a year, his team had built a large stainless steel pipeline which connected the villageto the lake.
At the grand opening celebration, Bill announced that his water was cleaner than Ed's water, Bill knew that there had been complaints about dirt in Ed's water. Bill also announced that he would supply the village with water twenty four hours a day seven days a week. Ed could only deliver water on week days.....he did not work on weekends. Then Bill announced that he would charge 75% less than Ed did for his high quality and more reliable source of water. The village cheered and ran immediately ran for the faucet at the end of Bill's pipeline.
In order to compete, Ed immediately lowered his rates by 75%, bought two more buckets, added covers to his buckets and began hauling four buckets each trip. In order to provide better services, he hired his two sons to give him a hand for the night shift and on weekends. When his boys went to college, he said to them, 'Hurry back because someday this business will belong to you.' For some reasons, after college his two sons never returned. Eventually Ed had employees and union problems. This union was demanding higher wages, better benefits and wanted it's members to only haul one bucket at a time.
Bill on the other hand , realised that if this village needed water then other villages must need water too. He re-wrote his business plan and went off to sell his high speed, high volume, low cost and clean water delivering system to the villages throught the world. He only makes a penny per bucket of water delivered, but delivers billions of buckets of water every day. Regardless if he works or not. Billions of people consume billions of buckets of water, and all that money pours into his bank account. Bill had delivered a pipeline to deliver money to himself as well as water to the villages.
Bill lived happily ever after and Ed worked hard for the rest of his life and had financial problems forever after. THE END
This is an extract from CASHFLOW QUADRANT by ROBERT KIYOSAKI
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